IRS Webinar on Taxes

    Kevin Thompson is an MLM attorney, proud husband, father of four and a founding member of Thompson Burton PLLC. Named as one of the top 25 most influential people in direct sales, Kevin Thompson has extensive experience to help entrepreneurs launch their businesses on secure legal footing. Recently featured on Bloomberg TV and several national publications, Thompson is a thought-leader in the industry.

    Disclaimer: I hate taxes. I hate talking about taxes and I hate paying taxes. As such, I’m no expert. Nonetheless, as Robert Kiyosaki points out, income tax is the largest expense incurred by EVERY business. Given the large amount of taxes incurred, minimizing tax liability is nonnegotiable. The question then becomes: how much can I write off as business expenses? In the direct selling profession, this is always a challenging question to answer. For distributors in the field, the line is usually blurred between personal expenses and business expenses. Where more deductions lead to lesser taxes, the temptation is to push the envelope and claim EVERYTHING as business expenses.  During this webinar organized by the DSA, the speaker gave some insights on how to determine if an expense is legitimately deductible.  See below for the slides.

    In a nutshell, the takeaways are as follows:

    • Business expenses are deductible when they are both “ordinary and necessary”;
    • Keep good records. When the IRS knocks, they’ll want to see substantiation all deductions;
    • Maintain separate bank accounts separating personal from business expenses;
    • When the line is blurred between recreational and business travel, keep all expenses separate and maintain records;
    • Purchases for personal use are not deductible;
    • Not all training expenses are deductible. Be sure there’s a specific purpose for the training;
    • If there’s a long history of loss in the activity, it could weight against you when claiming a deduction;
    • Personal competency matters. The more seasoned you are in the endeavor, the less flexibility.

    See the slides below. There’s not much additional information; however, it’s a good summary.

    IRS Tax Advice for Direct Sellers(function() { var scribd = document.createElement(“script”); scribd.type = “text/javascript”; scribd.async = true; scribd.src = “http://www.scribd.com/javascripts/embed_code/inject.js”; var s = document.getElementsByTagName(“script”)[0]; s.parentNode.insertBefore(scribd, s); })();

      Kevin Thompson is an MLM attorney, proud husband, father of four and a founding member of Thompson Burton PLLC. Named as one of the top 25 most influential people in direct sales, Kevin Thompson has extensive experience to help entrepreneurs launch their businesses on secure legal footing. Recently featured on Bloomberg TV and several national publications, Thompson is a thought-leader in the industry.